Q & A Database

The GIPS Standards Q&A database contains questions and answers (Q&As) on various searchable topics that provide additional interpretation on an issue. Q&As are considered to be authoritative guidance and must be followed in order to claim compliance with the GIPS standards.

Content from prior Q&As was included in the GIPS Standards Handbook as much as possible and many Q&As were archived. Change the Status drop-down filter to "Archived" to see the archived Q&As.

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Archived

Effective: 1 January, 2006 - 31 December, 2019

Categories: Private Equity

Source: Interpretive Guidance for Private Equity

Should early-stage venture investments be treated differently than more mature investments?

More mature investments with established profit, growth, and cash flow characteristics are in practice easier to benchmark against quoted market multiples for valuation purposes than are early-stage investments. In principle, early-stage investments should also be valued at fair value, although it is recognized that there will be instances where fair value cannot be estimated with any reasonable accuracy. In these instances, cost less estimated impairment needs to be used. Where early stage investments have raised material amounts of further funding on an arm’s length basis, this practice does provide a market-based value.